Rising unemployment puts Cameron’s work programme in the spotlight

The Guardian gets exclusive access to the scheme to get people off benefits – and finds in Hull, some barriers are hard to break

How do you help solve unemployment in a city such as Hull, where for a time late last year there were 58 jobseekers for each post, the highest number of applicants chasing every vacancy in the country? The government’s solution is the work programme, which David Cameron launched last summer, promising it would be “the biggest, boldest effort to get people off benefits and into work that this country has ever seen”. With unemployment at a 17-year high, the pressure for it to succeed could not be greater.

Here’s how it works in Hull, under the supervision of G4S, one of 18 organisations (mainly private companies) contracted to deliver the programme for the government.

On the second floor of a 70s block five minutes’ walk from the station, there’s an open-plan office filled with desks, clustered together in groups of four, run by Pertemps (“unearthing the spark of brilliance in everyone”) – the next layer down in a dizzying chain of contractors and subcontractors that is fulfilling part of the G4S contract in Hull. At each huddle there are three job coaches, who sit at their computers, receiving visits from Hull’s long-term unemployed.

Exuding kindness and energy, Amanda Knox-Holmes has meetings all day with clients from her 100-plus caseload. First she encourages Mary, 40, a vulnerable, troubled single mum with children in their late teens, to accept an unpaid, 12-week stint of work experience at a care home, as a possible first step towards getting a paid job with them.

“You’d get 12 weeks’ experience. You will serve food to the old people, you’ll do a bit of cleaning, help do activities with the old people. This is an opportunity to gain social care experience,” she says.

Mary says she has personal experience of caring for old people, and is initially uncertain.

“I could get a job out of it?” she asks.

“Yes, if you pull the stops out, they will be taking people on,” Amanda tells her, and she agrees to sign up.

Nationally, there have been reports of people doing unpaid work experience in large supermarkets, in a way that sounds potentially exploitative. Pertemps says it will never encourage work experience unless there is a real prospect of a job at the end of it, but the balance between experience and exploitation is a delicate one.

While her coach goes to get some paperwork, Mary says: “I’m not happy working for free. Nobody wants to work for free, but if it gets me on the ladder, if there’s a job at the end of it … I’ve been looking for four years. There are so many of you going for a job.”

Next Amanda sees Brian, who is in his late 20s, and sits fiddling with his hearing aid. Something in the way he holds his hands between his legs, and his endearingly childish expression of trust, hints at a profound vulnerability. His clothes are clean, but the smell of a damp, cold home hangs around him.

Once he had a job as a trolley attendant with Morrisons, which lasted 18 months until he had to move house; now he hopes to be employed by another supermarket. Amanda looks with him at the retail jobs advertised online, steering him away from ones that require managerial experience.

She asks him if he has an up-to-date CV. “I’m not very good at doing covering letters because of a lack of PC at home,” he tells her.

“Right, I think I need to book you in for an application form session.”

She asks what he wants to do. “I’m more into supermarkets. I tried to apply to Asda, but there was a lack of jobs,” he says.

Amanda will not allow him to give up. “We can send speculative letters to Asda and we could try Morrisons again. We’re just going to have to keep on trying.”

“I’m hopeful,” he says, but he sounds very sad.

Painstakingly, he signs an attendance form and hands over a £2.60 bus ticket, which she photocopies so he can be reimbursed for the visit. Because Brian is receiving the new incapacity benefit, employment and support allowance, the government recognises that it will be harder to find him work. If G4S manages to put him into a job that endures for two years, they will get the maximum payment from the government of about £14,000 (much higher than the equivalent £4,000 payment for a regular jobseeker); Pertemps will receive a cut of that payment. Brian leaves, shrinking his head into his shoulders as he crosses the room, like someone who expects to be bullied.

These people have been referred to the programme because they are long-term unemployed, and the jobcentre is not able to help them. At the first meeting, the coach sits with his or her client, and establishes what’s preventing the client from working (or in the frequently impenetrable language of the scheme, they conduct a diagnostic to identify their barriers).

Officially, the barrier is never simply that there are 58 jobseekers for every job available in the city (and in any case, staff point out cheerfully that the latest figure for Hull has dropped to just 22.6). The barriers they diagnose could be difficulties with basic literacy and numeracy, it could be drug or alcohol problems, it may be lack of transport, self-esteem, experience, skills or training. All of these things are problems to which Pertemps has solutions. The subtext is that external economic factors can never be the cause of someone’s unemployment: the problem must somehow lie with the individual.

The jobseeker is allocated a personal coach who will work with them for two years, helping them find courses that could address their alcoholism or equip them with forklift training, improve their English or their ability to add up. In fortnightly sessions, they will highlight jobs they could apply for, work on their CVs, teach them how to write covering letters, do mock interviews and help with motivation and confidence. They may be offered a course in how to be a good shop assistant.

Similar schemes existed under the last government. The two main differences with the work programme are, first, the “black box approach”, which means the companies that provide the scheme can do whatever they like as long as they get people into secure jobs, and, second, that the companies don’t get much money until they’ve put someone into a job, and won’t get the maximum payment from the government unless that person stays in work and claims no benefit for two years. The onus is on Pertemps to find people jobs that they can stay in, otherwise the business will fail.

The employment minister, Chris Grayling, likes to explain the model like this: “What we have tried to do is create a situation where our interests and the interests of providers are really aligned. They can make shedloads of money by doing the things we would absolutely love them to do.” The government expects some unsuccessful providers to go bust in the process.

Is it working? It’s hard to say. Nationally, government has (controversially) decided not to release figures until the programme has been running for 18 months, so there will be no way to analyse its performance before October.

In the Hull office, the advisers have not met their provisional targets. Pertemps gave figures for the number of clients they had seen and the number who had subsequently found work; these figures show that while they had found work for some people (below 100) they were not on target, however the Department for Work and Pensions and G4S requested that the Guardian did not publish the figures.

A report on the work programme published this week by the National Audit Office was positive about the payment by results model, but concluded that the calculation of the number of people who will find work was “over-optimistic” and that providers in areas of high unemployment might “struggle to meet targets”.

“It is hard. It is a hard labour market and our job is made harder by the state of the economy and there not being the jobs out there. There are [ex] public sector workers fighting for the jobs that our clients are fighting for. The long-term unemployed are pushed further down the list,” explains Mark Harrison, regional operation director of Pertemps. “You’re not going to get everyone into work. We’re looking at getting 50%-60% of people into work.”

The office needs to get 16 people into work a week, to be on track. Last week they found jobs for 15 people: a woman in her mid-40s (with plenty of retail experience) got a job stacking shelves in a supermarket; a younger man got a job as a factory cleaner; another woman was found a job in a care home (there was no transport for an early start, so Pertemps bought her a bicycle); an ex-army man (homeless since the break-up of his marriage and living in a hostel) got work as a security guard; someone else with a drug conviction who wanted to get back into plastering but was unsure how to admit to the conviction, found new work with the organisation’s help.

The job advisers are delighted every time a job is found, but they concede that a lot of these jobs are part time, 20 hours or fewer, when the individuals wanted full-time work. G4S will get paid so long as they stop claiming benefits (the cut-off starts at around 16 hours). Staff argue that a part-time job is better than no job, and that these posts could lead to more full-time work.

Critics predict that organisations will make their money by cherry picking, helping the easier-to-reach clients. “The reality is that they are going to park the difficult people because it is not worth them spending the money on them,” Stephen Timms, shadow employment minister, says.

At his company’s headquarters, Sean Williams, a pony-tailed welfare-to-work evangelist, and managing director of G4S Welfare to Work, insists this will not happen.

“We want to make a return, we think that we can make a return. We only can make a return if we do what it says on the tin, which is to help lots of people into sustained jobs, to save the taxpayer money,” he says. “Of course that becomes more difficult in a difficult macro-economic environment, but the news so far is that it is certainly not impossible and we are still meeting the targets that we were expecting to be meeting.”

Over the life-time of the programme, G4S is contracted to find long-term jobs for 125,000 of the 250,000 jobseekers it will see. The DWP has allocated £5bn to the work programme over seven years, of which G4S could take a £250m share. The company has never previously been in the welfare-to-work business, so views this as an experimental foray.

Williams argues that if 125,000 benefits claimants are helped into employment, G4S will be helping the government save £1bn a year in benefits payments (if the average cost of benefits is £8,000 to £10,000 a year). He has spent his entire career on welfare-to-work projects and is genuinely enthusiastic about this model. “It’s a really transformative opportunity for the British economy in terms of not spending money on keeping people in social exclusion, poverty, but spending it on bringing them into the economy and making them happier.”

A couple of days spent in the Hull office suggests that it will not be easy to meet the targets. The job coaches won’t brook any defeatism, but it’s hard not to keep wondering how assistance with CVs and motivational pep talks, however heartfelt, can overcome the stark local unemployment statistics.

In a classroom upstairs, an 18-year-old man with red acne scars and a powerful stammer, who has been unemployed since he left school with no GCSEs and whose parents have never worked, is sitting with a 33-year-old father of six, who hasn’t worked since his plastering job, helping renovate the Travelodge hotel, finished two years ago. They’re being taken through an induction programme by a man who introduces himself as a multifunctional trainer and who tells them (reading from a script) that: “Through a range of activities, we integrate your vocational, social, personal development needs with your work aspirations.”

“We want to share your brilliance with the rest of society,” he tells them. The teenager looks at his fingernails and the older man’s brow wrinkles with polite scepticism.

The trainer spends a long time taking them through the “You and I Charter”, which he reads with hushed reverence, as if it were poetry. “You and I need to always be on time… You and I need to sustain an understanding of what we are together aiming to achieve. You and I need to be proactive. You and I need to just be… You and Me.” The older man nods agreeably, the teenager bites his lower lip.

The 33-year-old says he wants to find work in construction, and is hopeful this may help. With such a large family, he is anxious to get a job as quickly as possible. The younger man wants to work in the catering industry; not many of his school friends have found jobs.

Outside the classroom there are a few banks of computers where another company, subcontracted by Pertemps, Learn Direct, is testing claimants’ maths and English skills through computerised tests. Harrison says that poor basic skills in maths and English are a huge problem and estimates that 25% of the people they see have below entry level 3 standards, which means that they are at a nine-year-old’s level.

A 26-year-old woman, who has previously done some bar work and cleaning jobs, but who hasn’t worked for years and who also left school without qualifications, is midway through a maths assessment. She is asked what 50cm is as a fraction of a metre, she clicks the 1/50 answer in the multiple choice box. “You need to swim eight lengths over a period of 32 minutes. How long should you spend on each length?” the computer asks, offering her possible answers of 4,8,16 and 256. She isn’t sure and skips the question.

“Sometimes if you haven’t done something for a while your brain dies a bit,” Olivia Bussey, the basic skills tutor, tells her encouragingly.

“I reckon my brain’s still asleep,” she replies.

Bussey was educated in Kenya, and although she has worked in this country for a decade, she is still surprised by the poor literacy and numeracy. “Our attitude to education is different: there is more emphasis on standards. Because your parents are paying for you to go to school you have to perform, there’s pressure on you. Here it’s not the same. A lot of them have problems in their background. The more privileged they are, the better you will find their levels.”

These are computerised programmes devised to help people over the course of a few weeks with literacy and numeracy problems that 12 years in school have not resolved. It is hard to feel certain that they could work, but Bussey thinks the courses that she started running here just two weeks ago will help people. “At school they don’t think it matters. When people come to us they are more motivated. They understand that it’s important. I explain that if they try they can have a much more successful life, so they do try harder.”

In London, G4S staff say the success of this kind of literacy and numeracy programme is being carefully monitored. If it doesn’t help more people get into work, then it will be abandoned.

Downstairs Amanda is talking to Cristof, a recovering alcoholic from Poland, with poor English, who used to work in factories in Hull but has been unemployed for several years. Since before Christmas he has been getting up at 6am to cycle to a charity that Amanda found for him, where he is learning joinery. He looks a bit ill, but capable and motivated. Amanda also sent him on a course to help with his drinking, and he tells her happily that he has given up smoking.

He is cheerful about what he has achieved. “Not only I’m learning, they are getting something from me. Yesterday I made bird tables, windmills. I can be there as long as I want to be,” he says. The work is unpaid, but he is pleased to be getting training.

There’s a peculiarity about the payment system here. The government money allocated for helping get people into work was meant to fund whatever external help they needed, but both the course for alcoholics, and the charity which is helping to train Cristof, receive no money from Pertemps or G4S for helping to make him more employable. Once he gets a job, any payment will go to G4S, and Pertemps will get a cut, but the charity will not receive anything.

With diminishing funding available for charities elsewhere, the work programme was originally highlighted by the government as a vital source of funds, but charities across the country warn that they are not benefiting from the programme in the way the government promised.

Later there is another induction session upstairs for people who are claiming employment and support allowance. These three men, all in their late 50s and early 60s, have been tested and provisionally found too unwell to work for the moment, but put into a “work-related activity group”, which means that they have to perform some work-related activities (such as attending this meeting) in order to continue getting their benefits.

Although they do not have to sign up for two years of the work programme, they are obliged to turn up to the Pertemps office in central Hull, and sit through this meeting for an hour. On a flipchart at the front of the room, there is a picture of a smiling shop assistant drawn in blue marker pen, left over from a retail skills class, annotated with lines pointing to positive aspects of his appearance: an approving arrow points to a tie, another line points to his armpit, and is marked “good hygiene”.

None of the men in this room look like they would be obvious employees at the flashy new shopping centre that has opened next to the railway station, full of not very full Top Shops, Zara and H&M.

“Why should you join the work programme?” the instructor asks. “It will give you increased quality of life, better health, increased independence, increased confidence, improved finances, improved social life and increased ability to be a role model for future generations.”

One yellow-faced, grey-stubbled man says nothing until the instructor asks if he is all right, and he replies that he is on morphine because he is recovering from an operation to remove two-thirds of his pancreas and bits of his spleen. “I’m a bit drowsy, from my medication. That’s why I don’t think I will get a job.”

He is 53, and before this illness has been working without break since he was 16.

Sitting opposite him, a 57-year-old ex-British Aerospace employee, who was made redundant two and a half years ago, decides he won’t be signing up, not least because he is suffering from prostate cancer, has just finished a course of radiation and is undergoing hormone therapy “I feel shocking,” he says.

“These personal development courses … I can understand the point of them if you’re 18, but if you’ve worked for 40 years … I don’t need a computer course – I could run one myself.”

He thinks the government should be spending money on encouraging people to set up businesses, rather than on this kind of programme.

He has already been on a previous government scheme run by a rival organisation, A4E, to no avail. “This is just a dead-end to nowhere, because the jobs market is so bad. There is only so many people who can go into retail and the retail market is dropping anyway because people haven’t got the money to spend,” he says.

Labour’s Hull North MP Diana Johnson is inclined to agree with him: “There will be people who need support and hand holding to get them into work, but there are also people who genuinely want to work and who can’t find a job. They are doing everything right, there just isn’t anything there for them.

“The coalition government’s whole approach to deficit reduction and growth relies on creating new private sector jobs to replace those cut in the public sector. But we’ve lost 40,000 private sector jobs in our region, including many skilled ones.”